The Serbian government adopted at its session yesterday the Bill on the budget for 2011 and forwarded it to the Serbian parliament for discussion under fast-track procedure.

The Bill on 2011 budget envisages revenues worth RSD 724.4 billion, expenditures of RSD 844.9 billion and
budgetary deficit of RSD 120.5 billion.

The government also adopted today the Bill on amendments to the Law on pension and disability insurance, the Bill on amendments to the Law on budget system, the Bill on amendments to the Law on excise, the Bill on amendments to the Law on value added tax and the Bill on amendments to the Law on taxes on using, keeping and carrying goods.

The government passed the Decision on allocating RSD 150 million as assistance to the clean-up of consequences of the earthquake that hit the city of Kraljevo.

Minister of Finance Diana Dragutinovic said that the Serbian government adopted today the Bill on the budget for 2011 which will have a deficit of 4.1% of the gross domestic product (GDP) or about RSD 120 billion, adding that the state has enough funds to cover this deficit.

Dragutinovic told a press conference held after the government session that the projected revenues for the state budget in 2011 are RSD 724 billion and expenditures RSD 845 billion.

Speaking about the projected budgetary revenues for next year, she said that they will be higher by RSD 64
billion than in the last revision of the state budget, while expenditures will be higher by RSD 65 billion than
planned in the previous revision, so the budget deficit will be increased by RSD 1 billion.

The basic assumptions of the 2011 budget are 3% GDP growth, unfreezing and growth of pensions and salaries by 2%, with the minimum wages having the highest increase.

Dragutinovic underlined that the maximum allocation from the budget for salaries is 8% of GDP and for pensions 10% of GDP.

She said that subsidies will remain at the same level as in 2010, except for public railway company Zeleznice
Srbije and Resavica mine, for which more funds will be set aside in order to increase salaries of employees.

The state plans to give incentives worth RSD 9.6 billion to joint car company Fiat automobili Srbija, but these
funds will be transferred from the budget of the Ministry of Economy and Regional Development to the budget of the Ministry of Finance, Dragutinovic explained.

She pointed out that RSD 32 billion has been set aside for investment in capital projects in next year, such as
construction of Corridor 10, adding that more than €500,000 has already been secured from foreign loans for
these purposes.

The institutions such as the Serbian Academy of Arts and Sciences, the Public Procurement Office, the Office of the Ombudsman and the Commissioner for Information of Public Importance will receive a significant increase in funds, Dragutinovic stated, adding that the National Audit Office will get four times more funds than this year.